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Data Tools Shaping the Future of Procurement
In just 5 years, there will be 5,200 GB of data for every person on
Earth. To put this into perspective, think about all the grains of sand on all
the beaches on Earth, now multiply that by 57. By 2020, the majority of this
data won’t be produced by humans, but by machines as they talk to each other
over data networks. Let’s think about our smart phones. Today we are constantly
taking pictures. Are you thinking about the 5 selfies you took on snap chat
this morning, or the picture of your dinner last night that you snapped just
for fun? Before smart phones, we didn’t take these pictures because it took too
much time and effort to develop them and there was nowhere to store them. But
today, we snap these pictures because we know we can store them or just simply
delete them at the touch of a button. That being said, about 90% of all the
data created is eventually abandoned.
This is how Michael Martine, CIO of Supply Chain Transformation at IBM,
led his discussion on the webinar entitled Technology
and the Future of Procurement, held on July, 9th. Martine went
on to explain there is a new era in supply chain where there is an increased
network orchestration and data is driven digitally around the world. How then are
we able to manage this data and analyze it? As you can see, the procurement
challenge in deriving all the necessary insights from all the disparate
internal and external data sources is intensively manual and time consuming.
However, today with new data tools, “On Demand” has become “Before I even
ask.” The data and analytics to solve a problem are essentially becoming available
for use before a problem even arises. This sourcing and exploiting of IT is
driving innovation and greater value. When processed and manipulated correctly,
combined with predictive analytics, data can provide strategic insight to help
drive cost savings and support overall spend management.
As Joe Payne, VP of Source One’s Professional Services explains in his blog,
in the past, procurement departments large and small have undergone a variety
of transformation projects, such as implementing supplier relationship
management programs, developing category management teams, etc. While these
steps are critical to obtaining savings, Payne explains: “they don’t allow us
to predict costs.” The game-changer? – Data.
Access to the right data can transform the way procurement departments’
function by making it possible to anticipate price changes and automating
business decisions, saving time, man power, and money.
Payne also explains that although major industries such as healthcare and
marketing are already taking advantage of “big data,” procurement is still
behind. To help get their procurement department up to speed, Source One hired
Data Scientist James Patounas. Patounas has started his own blog series at
Source One, titled Data
Acquisition, where he shares his expertise into data science, how
procurement departments can acquire and leverage data to automate business
processes and explains the different coding methods available that can be
implemented to help guide future purchasing decisions.
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